Qatar LNG halted, Iranian gas field bombed, European natural gas prices surge 35%

Iran’s continued attacks on Qatar’s energy infrastructure are pushing the global natural gas market into a highly tense state. On Thursday, European natural gas benchmark futures surged as much as 35% during trading. Qatar’s national energy company confirmed that its liquefied natural gas export facility in Ras Laffan suffered "major destruction" and sparked a large fire. Trump immediately posted on social media warning that if Qatar’s LNG facility is attacked again, the US will retaliate. Ras Laffan typically accounts for about one-fifth of global LNG supply. It is unclear how long the damage will last or the timeline for repairs. However, the market has already reacted—Dutch front-month futures, the European natural gas benchmark, were trading at €71.47 per megawatt hour as of 8:02 a.m. local time, a surge of 30.76%. Largest LNG Plant Damaged, Supply Disruption Worsens Earlier this month, the Ras Laffan plant closed after being attacked by Iranian drones, marking its first shutdown in thirty years of operation. On Wednesday, Israel launched an attack on Iran’s South Pars gas field, and Iran retaliated by attacking Ras Laffan, causing further extensive damage to the facility. Abu Dhabi’s Habshan gas plant was also forced to close due to debris from intercepted attacks. The full extent of the damage and the restoration timeline remain unclear. Qatar’s national energy company characterized it as "major destruction," meaning the prospects for returning to normal operations are significantly delayed. Arne Lohmann Rasmussen, Chief Analyst at Global Risk Management, said: “Qatar’s LNG could theoretically be offline for months, or even years in the worst case. For the gas market, this crisis will not automatically disappear with the end of the war or reopening of the Strait of Hormuz.” Asian Buyers Lead, But Global Supply Crunch Hits Europe The main buyers of LNG exported from the Middle East are concentrated in Asia, but this supply disruption has spread worldwide. If the Ras Laffan outage becomes prolonged, the balance of global LNG supply will tighten sharply, pushing prices higher everywhere. For Europe, the timing of this escalation is particularly unfavorable. Europe has just come out of winter and gas storage has been heavily depleted. This means Europe will need to purchase large amounts of LNG cargo this summer to replenish inventories, inevitably competing against Asian buyers for already reduced global supply. With pressure on both supply and demand, upward pressure on European gas prices is unlikely to ease in the short term. Trump Issues Warning, Geopolitical Risk Continues to Dominate Market According to Xinhua News Agency, Trump threatened that if Qatar’s liquefied natural gas facility is attacked by Iran again, the US “will use a force against Iran never seen before, to utterly destroy the entire South Pars gas field.” This statement raises market concerns about further escalation of the situation. Currently, reciprocal strikes between Iran and Israel have formed a cycle: Israel attacks Iran's South Pars gas field, Iran retaliates against Qatar's energy facilities. If this pattern continues, it will keep threatening global LNG supply and make it impossible for the market to anticipate when the crisis might end. Risk Warning and Disclaimer Markets are risky, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions in this article suit their particular circumstances. Investing based on this is at your own risk.